Immigration law & taxes

Third-country nationals who intend to stay in Austria for more than six months require a residence permit (“Aufenthaltstitel”), unless they have a right of residence according to Union law. Third-country nationals are persons who are not citizens of the European Economic Area (EEA) - which unites the EU Member States, Iceland, Liechtenstein and Norway or Switzerland. 

I.1. Kinds of Residence Permits 
Immigration law provides different kinds of specific residence permits that are connected with different specific rights (e.g. granting access to the labour market or not) and for which different conditions must be fulfilled. 
The following kinds of residence permits that grant a “Niederlassungsberechtigung” are of general importance for persons who intend to move to Austria and to establish their permanent residence here: 

(i)  RWR-Card (“Rot-Weiß-Rot-Karte”) 
(ii)  Blue Card – EU (“Blaue Karte EU”
(iii) Residence Permit without access to the labour market („Niederlassungsbewilligung – ausgenommen Erwerbstätigkeit“) 

(i) RWR-Card
A RWR-Card grants access to the Austrian labour market. There are different kinds of RWR- cards:

a)   RWR-card for highly qualified persons
Third-country nationals are eligible for a RWR-card for highly qualified persons if they achieve at least 70 points out of 100 points on basis of the specific criteria. A person eligible for a RWR-card receive an interim residence permit for 6 months to come to Austria for searching an adequate job, if he does not already have a job offer at the time of application. 
b)    RWR-card for qualified employees in jobs lacking personnel:
To apply for such a RWR-card, an employer must already have granted a job-offer. 
c)    RWR-card for self-employed persons:
Such a RWR-card is issued on basis of a positive expert opinion issued by the Austrian Labour market service on basis of a business plan submitted. The business pursued by the self-employed person must be of economic importance for Austria or at least a region and either transfer at least € 100,000 capital to Austria or create new/safe existing jobs. 
d)    RWR-card for start-up entrepreneurs:
Persons are eligible for this kind of residence permit if they achieve 50 points out of 85 points according to the specific criteria.  

(ii)  Blue Card – EU
The grant of a Blue-Card EU requires an already existing employment contract with an Austrian employer as well as a positive statement by the Austrian Labour Market Service that the employment does not negatively affect public and economic interests. The applicant must have a university degree following based on a university study that requires at least 3 years and the annual salary must exceed € 60,000. 

(iii) Residence Permit without access to the labour market 
The first-time application for this title is subject to a quota. The Austrian federal government fixes an annual immigration quota for each federal province.  The applicant must proof sufficient financial means to support his living without earning income in Austria. Such financial means may be savings, interest or rental income, dividends or entrepreneurial income from abroad. 

I.2. Application procedure 
Generally, first time applications for a residence title shall be filed in person abroad at the competent Austrian embassy before entering Austria. Only if a foreigner may travel visa- free to Austria he may file the application in Austria. 

I.3. Documents required 
The following documents must be submitted as original; the originals will be returned and copies will be kept on file: 
·      valid passport or other travel document (must be valid for at least three months beyond date of return) 
·      current biometric passport photo 
·      birth certificate 
·      if applicable: 
                 - marriage or civil partnership certificate
                 - divorce certificate or certificate of dissolution of a civil partnership 
                 - adoption certificate
                 - documents proving family relationships
                 - death certificate 
·      legal proof of adequate accommodation (e.g. ownership, lease or sublease) 
·      documentation showing the monthly rent and/or running costs of the accommodation 
·      proof of health insurance valid in Austria 
·      proof of sufficient means of subsistence ("Existenzmittel", "gesicherter Lebensunterhalt"), e.g. confirmation of pension payments or assets) 
·      documentation showing any loans and debts (e.g. current extract from the files of an officially recognized credit reference agency) 
·      confirmation of any maintenance payment obligations 
·      police clearance certificate ("Auszug aus dem Strafregister") from your country of origin (not older than three months).

I.4. Proof of basic language proficiency in German 
First-time applicants must provide evidence of German language skills at A1 level according to the Common European Framework of Reference for Languages. However, applicants with higher education that is comparable to an Austrian education required to study at a university do also fulfill the requirement for first-time application. The following language schools are recognized: Österreichisches Sprachdiplom Deutsch(ÖSD), Goethe-Institut, Österreichischer Integrationsfonds (ÖIF). The diploma or the certificate may not be older than one year at the time of the application. 


II.1. Income Taxation 
It is important to note that a natural person who is residentin Austria is subject to Austrian income tax with its worldwide income. The Austrian income tax act differentiates between seven different kinds of income that are divided into two big groups: business income and non-business income. 

Business income comprises income from agriculture and forestry, self-employed work and income from trade, i.e. all other business activities. Non-business income comprises income from employment, for which income tax is withheld by the employer, rental income, income from financial assets (interest, dividend income) and other income. For each kind of income, different provisions for income calculation exist. 

The total income derived from the seven kinds of income is subject to a progressive tax rate as follows:
        - € 0 to € 11,000                                      0%
        - over € 11,000 to € 18,000                    25%
        - over € 18,000 to € 31,000                    35%
        - over € 31,000 to € 60,000                    42%  
        - over € 60,000 to € 90,000                    48% 
        - over € 90,000 to € 1,000,000               50% 
        - over € 1,000,000                                   55% 

Capital gains from privately held financial assets and real estate are subject to a flat tax rateof 27.5% (for financial assets) and 30% (for real estate; however, a reduced rate of 4.2% on the sales price can be alternatively applied for real estate acquired before 2002). 


III.1. General 
Companies resident in Austria are subject to Austrian corporate income tax with their worldwide income as computed under Austrian tax rules. A company is resident in Austria for tax purposes if it has its legal seat or its effective place of management in Austria. 
The Austrian Corporate Income Tax Act (Körperschaftsteuergesetz, KStG, subsequently ACITA) provides for a flat tax of 25% on the company’s income, including capital gains. Irrespective of losses, a minimum tax of 5% of the statutory minimum share capital is levied (i.e., €1,750 for GmbHs and €3,500 for AGs). During the first ten years after incorporation of a GmbH, a reduced minimum tax applies in the amount of €500 for the first five years and €1,000 for the following five years. Any minimum tax payments can be offset against higher tax burdens in the future without limitation. Taxable income is principally calculated in line with general accounting rules, but adjustments must be made for tax purposes. 
Please contact us for more information. We will be happy to advise you.